Omnichannel and eCommerce consumer expectations are driving new cost pressures and challenges that cannot be addressed working in a silo as individuals or as an entire sector. The same connections, synergies, and inter-dependencies that exist between individuals also exist between sectors. And in today’s on-demand world, one of the strongest connections is between the warehousing and retail sectors.

That is why Zebra’s 2023 Global Warehousing Vision Study findings are equally important for warehousing and retail leaders.

There are three key warehousing trends that the retail industry simply cannot afford to ignore.

Trend 1: Modernisation

Customers’ preferences are changing while timelines are accelerating, creating complexity that is difficult to adapt to if caught lagging with legacy equipment and systems. Modernisation can increase productivity with the resources currently available, while creating the flexibility to adapt to new end-customer expectations. The survey results show that 73% of warehouse decision-makers are under pressure to implement new technology and transform into a modern warehouse. Naturally, modernising comes with a cost, and 69% of warehouse operators say they have or intend to increase funding for their warehouse modernisation plans.

Rapidly growing returns has emerged as a key challenge with 40% of APAC decision-makers citing this as a top operational challenge. New technologies like radio frequency identification (RFID) are being deployed to automate visibility of inbound and outbound freight to keep up with consumers’ demands for accuracy. Over the past year since the previous survey conducted in 2023, there is a 37% increase from 44% to 81% of warehouse decision makers planning to implement passive RFID and sensors to increase inventory visibility.

It should come as no surprise that as omnichannel shopping continues to grow, the volume of returns grows, thereby increasing the challenge across every part of the supply chain. The majority of warehouse operators (79%) agree they are under pressure to improve performance while adjusting to consumers’ shifting preference for omnichannel shopping.

To meet customer expectations, warehouse operators must modernise their operations using technology solutions. This will help them to handle returns, and increase agility, inventory visibility and demand forecasting to improve efficiency and make better decisions in real time.

What this means for retailers: According to Zebra’s 2023 Global Shopper Study, around eight in 10 consumers prefer to blend shopping between online and in-stores, while another 82% prefer retailers offering easy returns. The returns trend and need for more visibility is not going away any time soon. This means retailers must be in-step with their warehouse operators.

Retailers need to better manage the expenses associated with inventory visibility, reverse logistics and the growing level of returns to increase success and profitability. The good news is most retailers in APAC realise this and are tapping into the power of technology to help manage returns, with nearly seven in 10 (68%) saying they plan to deploy reverse logistics technology by 2026 to better manage fulfilment pressures.

Retailers should also optimise reverse logistics to drive efficiency and better business outcomes for inevitable returns and broaden their distribution network for a more versatile view of stores, warehouses and distribution centres where eCommerce distribution and store fulfilment capabilities overlap.

Trend 2: Increase inventory visibility

Warehouse operators are increasingly turning to augmenting their existing workforces with new and more efficient technology, while considering automation for high volume operations or improve inventory visibility.

Interestingly, according to a 2023 analysis conducted by Interact Analysis, there has been a recent slowdown in demand automation projects (in part due to a reduction in warehousing construction), but it is expected to return to growth in 2024.

Zebra’s 2023 Global Warehousing Vision Study supports this expected growth, with about seven in 10 warehouse decision-makers globally saying they already have or are planning to automate workflows by 2024. The majority of APAC warehouse associates and decision-makers are on the same page regarding the importance of achieving better accuracy and determining availability. Seventy-nine percent of both groups surveyed acknowledge they need better inventory management tools to drive these outcomes, and nearly nine in 10 (88%) warehouse decision-makers say they plan to invest in technology to increase visibility across the supply chain by 2028.

What this means for retailers: The shift in how consumers browse, learn, and acquire products requires retailers to rethink all their operations just as warehouse operators.

The expectation is that these experiences will be further developed, and, at the same time, retailers will have to work on executing them more profitably. There are several key elements to increase the profitability for omnichannel retailers. They can first modernise in-store fulfilment with real-time inventory views to streamline order fulfilment tasks. Next, they can broaden visibility in the distribution network with a more versatile view of stores, warehouses, and distribution centres where eCommerce distribution and store fulfilment capabilities overlap.

Trend 3: Make sustainability a top priority

Today, sustainability is an important requirement across many industries and is part of customers’ expectations. The warehousing sector is no different.

Warehouse operators are prioritising sustainability in their decision-making. Warehouse leaders say they are choosing solutions based on their ability to help them build sustainable operations. Eight in 10 APAC warehouse leaders say this is largely driven by regulations, energy costs and customer, investor, and worker expectations. Seven in 10 cite reducing emissions as a pressure and priority.

What this means for retailers: Australian consumers care about sustainability. Just over half (51%) say that sustainability is an important factor when making a retail purchase. Retailers globally recognise being eco-friendly is more than just a trend by 2028, with 61% of retailers saying they expect sustainability to become integral to their business strategy. Expect this to extend to fulfilment, whether from a store, warehouse, or distribution centre as the impact behind the scenes on the supply chain and on the planet has been staggering. Global parcel shipments have grown from 44 billion in 2014 to 132 billion in 2020 and are projected to approach 266 billion in 2026.

Moving ahead with momentum–and cautious optimism

Consumers demand the way they browse, acquire, consume, and return merchandise to be seamless wherever they shop, and however their purchases are fulfilled.

This shift requires retailers to work with warehouse partners and technology in new ways to deliver the shopping experiences consumers expect and drive more profitably. To successfully operate in an omnichannel world, retailers should consider modernising, increasing visibility and improving sustainability in their operations.

Brett Newstead is director of sales for ANZ at Zebra Technologies.